What will you do if you are an issuing bank and reliably discover the documents issued by the third party and presented (as B/L, courier receipt,..) are not existed and imitated by the beneficiary. Although, their surfaces are entirely complied with the L/C stipulated.
HDP
Best regards
IMO
if you know that the docs are fake for sure, banks do not have to pay because the docs must be apparently genuine to constitute a complying presentation.
in case of confirming bank has already paid to beneficiary without noticing the fake docs, imo, you will have to reimburse that bank.